Pricing is a transformation innovation (Liozu 2015b). To reach the pricing power zone
(Hinterhuber and Liozu 2012), firms and their pricing leaders need to focus on both
the technical and the social sides of pricing (Liozu 2016). In fact, the full impact
of pricing can only be reached when firms focus on both pricing strategy and pricing
execution. And successful pricing execution requires processes, capabilities, change
management, and the support of top leadership (Hinterhuber and Liozu 2019).
Despite the publication of an increasing number of papers related to the organizational
and social dimensions of pricing, much of the attention to pricing by consultants,
practitioners, and scholars continues to focus on its technical, analytical side (Hinterhuber
and Liozu 2015). Most pricing elective courses proposed in MBA program focus solely
on the quantitative and analytical while seriously neglecting aspects of organizational
design for pricing, cultural implications of pricing transformations, and soft-skill
requirements for transforming pricing mindsets (Liozu 2015a).
Organizing for effective pricing has been a limited but central research topic since
the inception of research on pricing: in Pricing in Big Business (Kaplan et al. 1958),
Kaplan dedicates an entire chapter to pricing organization. What began as descriptive
research is now a growing, albeit small, body of increasingly prescriptive research
on price delegation (Frenzen et al. 2010; Stephenson et al. 1979), the interdepartmental
centralization of pricing (Homburg et al. 2012), the organizational configuration
of price management (Burkert et al. 2017), the role of CEOs in organizing pricing
(Liozu and Hinterhuber 2013), pricing capabilities (Töytäri and Rajala 2015), and
other related issues. More recently, scholars have paid more attention to the individual
factors influencing team or organization pricing decisions (Hinterhuber and Liozu
2017). The focus on micro-foundations of pricing has revealed interesting findings
related to biases and preferences in individual team members and how these influence
pricing orientation and organization (Kienzler 2018).
Nevertheless, compared with other salient aspects of marketing, our understanding
of what constitutes excellence in organizing the pricing function is arguably shallow.
To cite a few examples, we know little about how to configure the pricing function
to increase overall firm performance. We know little about the origins and evolution
of pricing capabilities and how dynamic pricing capabilities enable dynamic strategies.
We lack understanding of pricing metrics and of psychological or behavioral traits
of effective pricing managers. Finally, pricing continues to be ignored by C-suite
executives despite strong evidence of direct impact on the bottom line. From an academic
perspective, pricing continues to be neglected.
Motivation for the special issue
Over the past ten years, we have devoted our attention to researching the field of
pricing from an organization, behavioral, and psychological perspective. From special
issues to books to research papers, we have strived to fill the gap and help pricing
practitioners be more successful by embracing these unique dimensions of the pricing
discipline. The motivation for this special issue continues this effort. We wanted
to propose a vehicle for scholars and practitioners to share their experiences and
research findings to advance the pricing field. Our resolve to make the pricing discipline
a more complete one is unchanged. We continue to believe that there is a great need
for additional empirical inquiries focused on pricing’s organizational, social, and
Content of the special issue
After distributing the call for papers through various channels, we generated tremendous
interest in the topic for our special issue. However, the COVID-19 pandemic challenged
our ability to secure commitments from potential contributors. It also complicated
the review process, as scholars were busy redesigning their curriculum for an all-virtual
environment. Our efforts and the double-blinded review process yielded four papers
for this special issue. Three of these papers are empirical studies focused on the
specific topic of organizing for pricing. The fourth is a practice paper focused on
the management of value and pricing in organizations.
The first paper, “The adoption of pricing from an organizational perspective and its
impact on relative firm performance,” by Stephan Liozu, investigates the influence
of four organizational factors on the adoption of pricing and the impact of increased
pricing adoption to relative firm performance. Based on responses from 540 pricing
practitioners, the results highlight the positive influence of organizational alignment,
cross-functional collaboration, and top championing support on the adoption of pricing.
They also reveal that too much formalization in the pricing process negatively influences
adoption. Finally, the paper concludes that the greater the adoption of pricing, the
greater the relative firm performance.
The second paper, “Value first then price: the new paradigm of B2B buying and selling,”
by Andreas Hinterhuber, Todd Snelgrove, and Bo-Inge Stensson, explores ways to remedy
the adversarial approach between buyers and sellers in order to improve profitability.
The authors present a set of principles that enable companies to put joint value creation
at the center of their relationships with suppliers and customers.
The third paper, “Factors that contribute to managers becoming engaged in unintentional
price war,” by Richard Cardot, Dick Boland, and Stephan Liozu, focuses on a qualitative
inquiry to better understand price-war behaviors in firms. This paper highlights the
factors that lead well-educated pricing managers into price wars despite their desire
to avoid them. This qualitative inquiry involved semi-structured interviews with 25
pricing managers across five industries. The findings confirm that pricing managers
have a strong desire to avoid price wars and that pricing managers frequently blame
competitors for aggressive pricing action. The paper also identifies several common
characteristics among the study participants.
The fourth and final paper examines the presence and impact of complex alternative
organizational configurations of pricing on firm performance. The dataset is from
a survey of company owners and company CEOs, of which a subsample was used previously
and analyzed with multiple regression analysis. Stephan Liozu, Sven Feurer, Andreas
Hinterhuber, and Arch Woodside propose analysis of an enlarged dataset that includes
new data, using fuzzy-set qualitative comparative analysis (fsQCA). The findings support
the perspective that multiple price-policy paths are identifiable for indicating high
performance for different firm operational contexts. By applying the perspective of
complex interdependencies of specific pricing activities and specific organizational
configurations related to pricing, this study offers a nuanced contribution to marketing
theory. To practicing managers, it offers guidance for adopting specific configurations
of pricing policies in specific contexts for achieving high firm performance as well
as for which configurations indicate negative firm-performance outcomes.
This is clearly insufficient to make a dent in the vast gap we highlighted in the
introduction of this editorial. But these four papers contribute to our argument that
more attention needs to be given to the nontechnical dimension of pricing. We offer
four papers with different methodologies and different sets of hypotheses related
to the organization of the pricing discipline. We encourage pricing, marketing, management,
and organizational behavior scholars to continue to investigate the pricing discipline
through different lenses. As more and more firms begin pricing journeys, we hope,
through the dissemination of empirical and evidence-based research, to guide them
in their quest for greater pricing excellence.